When markets are passing through choppy waters, investors often rely on the healthcare sector to safeguard their investments. This is because the demand for healthcare services does not vary with market conditions, making them a safe haven during difficult times. Many pharma companies also generate regular dividends, which go a long way in softening the blow dealt by plummeting share prices. Mutual funds are the perfect choice for investors looking to enter this sector since they possess the advantages of wide diversification and analytical insight.
Below we will share with you 5 top rated health mutual funds. Each has earned a Zacks #1 Rank (Strong Buy) as we expect these mutual funds to outperform their peers in the future. To view the Zacks Rank and past performance of all health funds, investors can click here to see the complete list of funds.
Kinetics Medical No Load (MEDRX) invests a large share of its assets in companies whose principal operations are related to medical research, pharmaceutical and medical technology as well as related sectors. It focusing on companies engaged in cancer research and drug discovery. The healthcare mutual fund is non-diversified and has a three year annualized return of 11.36%.
The healthcare mutual fund has a minimum initial investment of $2,500 and an expense ratio of 1.39% compared to a category average of 1.52%.
Fidelity Select Medical Delivery (FSHCX) seeks capital growth. The fund invests in firms engaged in the delivery of health care services. Such companies include those which manage hospitals, nursing homes health maintenance organizations and other firms focusing on delivery of healthcare services. The healthcare mutual fund has a three year annualized return of 11.91%.
Steven Bullock is the fund manager and has managed this healthcare mutual fund since 2012.
Schwab Health Care (SWHFX) invests the majority of its assets in the healthcare sector. It mainly invests in equity securities but may also invest in derivatives. The fund focuses on investing in domestic firms, but may invest up to 25% of its assets in other countries. The healthcare mutual fund has a three year annualized return of 17.71%.
The healthcare mutual fund has a minimum initial investment of $100 and an expense ratio of 0.82% compared to a category average of 1.52%.
Vanguard Health Care Index (VHCIX) seeks to match the performance of the MSCI U.S. Investable Market Health Care 25/50 index and invests primarily in healthcare stocks. This index consists of stocks of companies of all sizes from this sector. The healthcare mutual fund has a three year annualized return of 15.44%.
As of December 2012, this healthcare mutual fund held 295 issues, with 10.55% of its total assets invested in Johnson & Johnson.
Biotechnology UltraSector ProFund Service (BIPSX) invests in equity securities and derivatives which together should provide daily returns which are 150% of the daily return of the Dow Jones U.S. Biotechnology Index. The healthcare mutual fund is non-diversified and has a three year annualized return of 31.63%.
Hratch Najarian is the fund manager and has managed this healthcare mutual fund since 2011.
To view the Zacks Rank and past performance of all health mutual funds, investors can click here to see the complete list of funds.
About Zacks Mutual Fund Rank
By applying the Zacks Rank to mutual funds, investors can find funds that not only outpaced the market in the past but are also expected to outperform going forward. Learn more about the Zacks Mutual Fund Rank.
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